British music company EMI Group Plc said on Thursday it bought a further 30 percent stake in a catalog of classic Motown songs such as “My Girl” and “I Heard It Through the Grapevine” for $109.3 million.
EMI purchased the stake in the Jobete song catalog from Motown Records founder Berry Gordy, taking its holding to 80 percent.
Gordy, who helped create dozens of classic songs from a cramped basement studio in Detroit known as Hitsville, USA, had told EMI last year he would exercise an option to sell all of his remaining 50 percent stake in Jobete.
But he has now decided to keep a small stake.
“I am thrilled to still be a part of Jobete,” Gordy said in the statement.
EMI said it will fund the acquisition from the proceeds of last November’s sale in its final 14.5 percent stake in music retailer HMV Group Plc. HMV was floated on the stock exchange last May.
“This new agreement is part of our strategy to redeploy our assets from non-core activities…into core music businesses such as this highly valuable and sought-after catalog,” EMI Chairman Eric Nicoli said in the statement.
EMI’s shares were up 0.8 percent at 92 pence at 1050 GMT.
The company and Gordy also announced a partnership to develop a Broadway musical based on the Motown catalog, which includes the publishing rights to songs such as “Three Times a Lady,” “Tracks of My Tears” and “Superstition.”
Gordy will also have the option to sell his remaining 20 percent stake to EMI in April 2004, or April 2005, and EMI will have the option to buy him out in October 2005. In either case, the price will range from $75.1 million to $86.3 million.
The persistently popular songs bring in lucrative licensing fees. The recent documentary “Standing in the Shadows of Motown,” which told the story of the unsung Motown backing band, recently won a Grammy award for best compilation soundtrack.
EMI, whose corporate debt was cut to “junk” status by Moody’s last month, has struggled along with the rest of the recording industry amid slumping sales.
The London-based International Federation of the Phonographic Industry said on April 9 that 2002 global music sales were off 7.2 percent at $32.2 billion.